Samsung on Wednesday withdrew its $5.85bn proposal to acquire all the outstanding shares of SanDisk citing the US flash memory card maker?s declining value amid the deepening industry downturn.

The S. Korean company has been making efforts to pursue an acquisition with SanDisk Corporation for last six months but both parties have not been able to reach an agreement. Sandisk last month rejected the unsolicited bid, saying it was too low.

"The decision to withdraw the proposal to acquire SanDisk Corporation at $26 per share was made in considerations of the growing uncertainties in SanDisk?s business, its stand alone value, and the current difficult economic environment," said Lee Yoon-woo, Samsung?s chief executive officer in a statement.

Through the deal, Samsung wanted to widen its lead in the Nand flash memory business over rivals such as Toshiba by acquiring SanDisk?s intellectual property rights and its brand value in the memory card business.

SanDisk shored up its takeover defences this week by selling 30% of the capacity in the manufacturing joint ventures with Toshiba to its Japanese partner.

Earlier this week, SanDisk reported an operating loss of a quarter billion dollars for a second straight quarter.

Samsung controls 42.3% of the Nand flash memory market, trailed by Toshiba with 27.5% and Hynix with 13.4%, according to market researcher iSuppli.